Author(s): Jagabandhu Padhy, Amit Bathia, Mangesh Nigudkar, Sunny Oswal, Christine D’lima and Prasad Naik
The Insolvency and Bankruptcy Code was implemented to address the emerging challenges of corporate insolvency in India and provide for a systematic approach toward resolution of distressed assets. By using the Altman Z-Score model, this paper analyses the financial condition of the firms under the IBC to predict the risk of bankruptcy of companies. This paper studies the way the Z-Score model correctly evaluates the solvency and risk of default of companies, thereby guiding the stakeholders through their decision-making processes. The analysis of companies in IBC proceedings will help bring out patterns in financial distress and evaluate if the relevance and accuracy of the Z-Score hold in emerging markets. The study offered an insight into bankruptcy predictive models, occasionally highlighting the importance of financial metrics in corporate recovery strategies.